Q4 2023 Earnings Summary
Reported on Feb 5, 2024 (Before Market Open)
Pre-Earnings Price$74.59Open (Feb 5, 2024)
Post-Earnings Price$74.59Open (Feb 5, 2024)
Price Change
$0.00(0.00%)
- Earnings per share increased by over 80% to $6.29 in 2023 , and book value per share rose to $70.69 , showcasing Loews Corporation's strong financial performance and robust growth across its subsidiaries.
- Subsidiaries demonstrated exceptional performance: CNA reported record core income of nearly $1.3 billion, a more than 50% increase over 2022 ; Boardwalk Pipelines reported full-year EBITDA of $929 million ; and Loews Hotels achieved Adjusted EBITDA of $328 million , highlighting the diversified strength in Loews's portfolio.
- The company believes its shares are undervalued, leading to significant share repurchases totaling $852 million in 2023, reducing the share count by about 6%. The market undervalues its non-public subsidiaries, with $1.3 billion in combined EBITDA from Boardwalk and Loews Hotels valued at only about $4.6 billion.
- Persistently Underperforming CNA Share Price: Despite CNA's strong operational performance, including a record core income of nearly $1.3 billion and a 9% increase in net written premiums in 2023 , its share price remains almost 20% lower today than it was at the beginning of 2018. This could negatively impact Loews's valuation, given its significant investment in CNA.
- Heavy Dependence on Share Repurchases: Loews has heavily relied on share repurchases as a capital allocation strategy, buying back 14 million shares for a total cost of $852 million in 2023, amounting to about 6% of the shares outstanding. Since the end of 2018, they've repurchased over 91 million shares, reducing the share count by about 29%. This may indicate a lack of attractive growth opportunities and could raise concerns about the sustainability of this strategy.
- Market's Low Valuation of Non-Public Subsidiaries: The market is valuing Loews's non-public subsidiaries at about $4.6 billion, which management considers "extraordinarily cheap" given that the combined EBITDA of Boardwalk Pipelines and Loews Hotels is nearly $1.3 billion. This discrepancy might reflect market skepticism regarding the future prospects or profitability of these subsidiaries.
Research analysts covering LOEWS.